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Pound Falls After Reports of Pressure on May to Resign

Sterling slumped on Wednesday after reports that U.K. Prime Minister Theresa May could resign as soon as today amid continued Brexit chaos.

GBP/USD fell 0.5% to 1.2637 as of 10:22 AM ET (14:22 GMT), a low not seen since January. The pound also fell to a four-month low against the euro, with EUR/GBPjumping 0.6% to 0.8833.

May proposed a revised version of the Withdrawal Agreement Bill to Parliament on Wednesday. The bill will be officially published on Friday and includes the option of a second referendum on Brexit. Her Cabinet and backbench lawmakers have revolted at the new version, which threatens to leave the U.K. as a "rule-taker" from the EU on labour and environmental issues, as well as crimping its future trade policy.

As she loses support from her Cabinet for the deal, other reports have surfaced that members of parliament could put pressure on her to resign as soon as today, by changing the party's internal rules to allow another challenge to her leadership.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was unchanged at 97.877 as fears of an escalating trade war between the U.S. and China resurfaced.

The U.S. is looking to blacklist more Chinese companies, just days after it eased restrictions on Chinese tech giant Huawei. Investors are concerned that banning Chinese companies from buying American products could have negative consequences across the broader technology sector.

The U.S. is looking at similar restrictions on other companies, including Chinese video surveillance company Hikvision, according to Bloomberg and the New York Times.

The greenback was down against the safe haven Japaese yen, with USD/JPY falling 0.1% to 110.36. EUR/USD rose 0.1% to 1.1164 and USD/CAD dipped 0.1% to 1.3392.